Corporate Turnaround Business Financing ABL | 7 Park Avenue Financial

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ABL Is Extreme Corporate Turnaround Business Financing : Why Asset Based Lending Works When You Need It Most
ABL Erases That Dwindling Options Feeling When It Comes To The Business Turnaround Finance Solutions



 

YOUR COMPANY IS LOOKING FOR  TURNAROUND FINANCING SOLUTIONS !

ASSET BASED LENDING COMMERCIAL FINANCE SOLUTONS FOR REFINANCING

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Financing & Cash flow are the  biggest issues facing business today

ARE YOU UNAWARE OR   DISSATISFIED WITH YOUR CURRENT  BUSINESS  FINANCING OPTIONS?

CALL NOW - DIRECT LINE - 416 319 5769 - Let's talk or arrange a meeting to discuss your needs

EMAIL - sprokop@7parkavenuefinancial.com

7 Park Avenue Financial
South Sheridan Executive Centre
2910 South Sheridan Way
Oakville, Ontario
L6J 7J8

 

Corporate turnaround business financing, simply put, involves the ' fixing ' of some major problem issues in a Canadian business. One of the best solutions for ' the fix ' is ' ABL ‘asset based financing. Let's explain why, so let's dig in.

FIXING WHAT WENT WRONG  IN BUSINESS FINANCING

Top experts will agree that there is nothing more challenging than a turnaround - in effect its a ' renewal ' of a business and financing will not always, but more often than not play a major role in that renewal.  Going through that whole process is also a tremendous way to simply understand ' what went wrong ‘, and as we've said many times:

 

‘Tuition is very costly in the school of experience'

 

4 KEY ISSUES IN TURNAROUND FINANCING 

 

During a ' turnaround' several major issues tend to always come up - they includes areas such as:

 

1. People issues

 

2. Rightsizing the company to allow it to grow again

 

3. Address legal issues that might even include a protection filing under Canada's CCAA process (It’s the equivalent of Chapter 11 in the United States

 

4. The need  to restructure business debt / working capital needs

 

We're focusing mostly on the area of financing here, but it's safe to say a lot of other issues are always going to come into play.  Also we're predominantly talking about an ' operating' turnaround as opposed to some of the ' strategic ' issues involved in products, markets, engineering, etc.

 

HOW DOES  ' ABL ' ASSET BASED LENDNG HELP A TURNAROUND?

 

ABL...  It’s the acronym for asset based lending helps address the 3 key areas of    corporate turnaround business financing - sales revenues, cost issues, and asset management and finance issues. It's simply one key effective solution that allows a financial restructure of the firm to be completed in its entirety.

 

THE ALTERANTIVE TO NEW OWNER EQUITY

Refinancing growth when equity issues are strained it what an asset based line of credit it all about. While more often than not it’s an operating facility that encompasses all the companies assets it can also, when applicable, include a term solution that is complimentary to the overall long term needs of the company.

 

ASSET BASED LOANS ARE PRIMARILY NON BANK IN NATURE

 

It should be pointed out that typically an ABL business credit facility is a non-bank solution. (NOTE - Some banks offer ABL financing but the why and how of that is a subject for another day)

THE COST OF FINANCING

ABL will sometimes be priced as competitively as a bank solution - we will call those TIER 1 asset financing, but most firms requiring a turnaround will typically pay a major premium to bank pricing  because of the inherent credit and perception challenges involved in a turnaround .

 

ASSET BASED LOANS ARE ALL ABOUT YOUR SALES AND ASSETS

The essence of the ABL turnaround solution is the financing of all the business assets of the firm, margining their borrowing power to the maximum. Typically  accounts receivable  are financed at 90% of their ongoing value , inventory is margined at anywhere from 25- 75%, and the most unique part of the ABL solution is the ability to carve out the fixed assets/equipment of the business and include them in the borrowing power mix. Real estate that is company owned can also be included as a part of the asset based loan, further enhancing working capital access.

 

DUE DILIGENCE

Typical requirements to get the ABL solution in motion include  due diligence around the business assets, the firms ability to prove it can provide ongoing financials, a long term cash flow  and sales forecast , etc

 

CONCLUSION

If your company needs to address corporate turnaround business financing consider ABL as one method of getting the solution in place quickly. Those dwindling options you thought you suddenly emerge with a clear viable solution that's alternative in nature but has proven to work well for thousands of firms.

 

Seek out and speak to a trusted, credible and experienced Canadian business financing advisor who can assist you with financing when you need it most.

 

Click here for the business finance track record of 7 Park Avenue Financial





7 Park Avenue Financial/Copyright/2021/Rights Reserved

' Canadian Business Financing With The Intelligent Use Of Experience '

 STAN PROKOP
7 Park Avenue Financial/Copyright/2024

 

 

 

 

 

Stan Prokop is the founder of 7 Park Avenue Financial and a recognized expert on Canadian Business Financing. Since 2004 Stan has helped hundreds of small, medium and large organizations achieve the financing they need to survive and grow. He has decades of credit and lending experience working for firms such as Hewlett Packard / Cable & Wireless / Ashland Oil